The coronary arterial system is essential for cardiac function. We previously identified that coronary vascular progenitors arise from a unique extracardiac cell population, the proepicardium (PE). However, little is known about how coronary progenitor cells are induced and recruited to the heart during embryogenesis. Our preliminary data show that a paracrine cue(s) from the liver bud endoderm can induce adjacent mesodermal cells to enter the PE cell fate. This earliest event of coronary development is suppressed in the left side of the mesoderm, where a laterality gene Pitx2 is expressed. Importantly, ectopic expression of Pitx2 in bona fide PE cells can suppress a PE marker gene Wt1. At the right side, the PE undergoes massive outgrowth that precisely targets the inner curvature of the atrioventricular junction (AVJ) of the looping stage heart. Upon contacting the myocardium, cells on the tip of the growing PE establish a unique intercalation of cellular processes with myocytes. PE extension can be activated by AVJ myocytes, which highly express Bmp. Bmp can mimic this instructive action of AVJ myocytes in vitro. Conversely, a Bmp antagonist Noggin diminishes PE extension activated by AVJ myocytes. These preliminary data lead to the hypothesis that induction and recruitment of coronary progenitor cells to the heart are mediated by three distinct mechanisms: 1) asymmetric induction and development of the PE in the mesoderm; 2) oriented PE villous extension by an AVJ-derived directional cue(s); and 3) increased adhesiveness of PE cells to myocytes at the AVJ. This proposal will experimentally test these hypotheses by determining: the asymmetric responsiveness of the mesoderm to a liver bud endoderm (Aim 1); PE extension in response to activated and inhibited AVJ-derived Bmp signals (Aim 2); and the affinity and mode of attachment between the PE and various regions of the myocardium (Aim 3). The studies proposed here will identify the mechanisms that regulate the three earliest steps in coronary arterial development and build a foundation for rational therapeutics of coronary disorders in adults.